General Posts

climbing up the hockey stick

It really is hard to believe that it’s been nearly eight years since the day in Geneva when I met Dennis Whittle.   I went 4,073 miles to meet the guy who would turn the page to my career’s second chapter, when his office was just 3 miles from my house.  Three weeks later I met the other half of the founding duo – Mari Kuraishi.  Needless to say they were smart, direct, and impressive.  So not long after that I found myself toiling along with them and two handfuls of others in that sometimes smelly, often music-filled and always fun office above the thrift store down the street.

One of the first things they suggested I do was to read their business plan.  So I did.  It had, like legions of business plans before it, the classic hockey stick growth curve.  In our case, the unit being donation volume.  According to this plan, we would be at $40 million in annual donation volume, and “pay our own freight” by about 2005.  Um, we didn’t quite make that.  Many slightly less sloped hockey sticks followed.  When things didn’t take off like a rocket ship we tried new things, always led by our two fearless (and in this case that word really applies) leaders.  We tried plan b, plan c, and plan d, always with our eyes on the prize of working to make it possible for great organizations around the world to access funds and for donors of all shapes and sizes to support the causes that inspired them.

So here we are in 2011, celebrating two things.  First, our donor community just crossed $50 million in aggregate contributions.  Second, for the first six months of the year we more than “paid our own way,” covering 103% of our expenses on our own steam.  The business model is different from what was in the original plan.  The mix of donation activity is different from what was in the plan.  The mix of revenue comes from sources not in the original plan.  And we don’t yet feel like that 103% is a lock consistently, but we see the end of the tunnel.

Roles have evolved; Dennis has transitioned off the staff and onto the Board.  Mari runs the day to day with her quiet, determined leadership style.

Why did they persevere?  Ten days ago Dennis wrote a very poignant blog post, made moreso by his mom’s passing just a day later.  The post gives some insight into what motivates him.  Mari  has different, but equally inspiring, motivations as described in this Wharton Blog from earlier this year.

From the perspective of their team, we are glad they did press on.  Because they did, more than 50 million dollars have been contributed to social entrepreneurs and nonprofits around the world who are working to educate children, feed the hungry, build houses, train women (and men) with job skills, and catalyze hundreds of other important initiatives. This past week, a generous donor in Singapore gave the 50 millionth dollar through GlobalGiving to help with relief for the East African famine.  This was possible largely because Dennis and Mari have persevered to build a team and a platform that continue to live up to our mission of “unleashing the potential of people around the world to make positive change happen.”

Why 15% Makes Sense

People sometimes ask me why we charge a 15% transaction fee.  My cheeky answer is, “So I can be sitting here having this conversation with you.”  As Chief Program Officer at GlobalGiving, my job is to make GlobalGiving more valuable to more organizations around the world.  We work with thousands of organizations, qualifying them, supporting them, disbursing funds to them, monitoring their activities, and maintaining an online platform for them to connect with donors.  Work at this scale would be impossible with an all-volunteer team.  Without great people and robust systems working full-time, GlobalGiving does not work.

Could we find a large donor to fund operations, making the ongoing transactions free?  Maybe, but we believe a transaction-based fee is a better idea.  Funders like Skoll Foundation, Omidyar Network, Hewlett Foundation, Packard Foundation, Rockefeller Foundation, and Kellogg Foundation have invested in our effort to make the transaction-based model work, and we’re almost there.  The model gives GlobalGiving a strong incentive to invest in the performance of our marketplace, which aligns nicely with our partner organizations’ goals and the needs of donors – the more funds flowing, the greater the social impact.  We are motivated to build better tools for donors and project leaders, we aggressively court corporate partners, we attract donors through a strong social media presence, we offer free training and development opportunities to our project leaders, and we find innovative ways to demonstrate results.  We strive to earn our 15%, and GlobalGiving only works if we deliver the value.

So, why do organizations decide that 15% is good value?  We connect them with new donors, we provide donor management tools, and for some organizations we save the expense of maintaining a transactional web platform.  For international organizations, the ability receive tax-deductible contributions in a secure, transparent platform is worth the 15%.  We do not charge organizations an up front fee to participate in GlobalGiving, so fees only exist when donations flow, and we’re careful to explain the fee to all prospective organizations.  Donors should feel good giving to organizations on GlobalGiving, because each organization calculates that our platform is worth 15%.  Donors always have the option of covering that 15%, and over 50% do just that.  Donors should expect to receive quarterly updates and can exercise the GlobalGiving Guarantee if the experience doesn’t meet expectations.  We just finished our best year yet, delivering more funding to more organizations than ever before.

That said, our 15% does not work for many organizations.  For organizations that maintain a web site with transaction processing, or have a staff dedicated to donor management, or do not like to accept project-specific funding, GlobalGiving is probably not a good fit, and that’s fine.  If a donor simply wants to fund general operations of a US nonprofit, that donor should give through that organization’s web site or a portal like Network for Good, both of which have lower fees.

Our commitment to this model holds us directly accountable to the donors and organizations connecting on our platform.  Organizations and donors do not have to use GlobalGiving  If we are not worth our 15%, people will stop transacting, and GlobalGiving will not survive.  If we are worth our 15%, more transactions will happen, we will continue to improve the platform, and we might just improve the efficiency of giving to the most effective organizations worldwide.

A first person account of haiti one year later


Below is an excerpt from a note sent by Marisa Glassman to several of our corporate partners this week:

Britt Lake and I spent a week in Haiti in January visiting a number of GlobalGiving project partners, all of which our corporate partners’ employees and communities supported through GlobalGiving last year. I intended to follow-up sooner after my trip, but I’ve admittedly had somewhat of a difficult timing wrapping my mind around what my exact messaging to partners should be. Because as productive and motivating as much of what I saw was, there is still much room for improvement.

The great news is that the organizations we visited were incredibly inspiring.  We specifically targeted some of the smaller, lesser known organizations to better familiarize ourselves with their work.   And we were not disappointed.  The happy, healthy, and absolutely adorable orphans at the Rivers of Hope Orphanage were a joy to see, and the conditions they lived in would make any adoptive parent or donor happy and proud.  We saw some truly community-based work during our visit to European Disaster Volunteers, visiting the various schools and orphanages with which they work.  We met with a clean water organization called Deep Springs International, which is not only distributing chlorine solution and buckets to thousands of families but also employs mostly Haitian workers (all but two of its roughly 240 employees). We visited a Haitian organization called Lambi Fund, with which we have been working for years prior to the earthquake, and met an entire group of their beneficiaries in a rural part of the country.  We visited with International Medical Corps, who operates a primary health care clinic in one of the largest tent cities in Port-au-Prince on the grounds of a former golf course.  They were also kind enough to stay with us for over an hour while our truck got stuck in the mud on the way out of the area (never a dull moment!).  And that was only about half of our visits – there were many other very interesting and moving encounters that week as well.

As I’m sure you’ve heard and read about recently, not all the news to report from our trip is good.  Many people are questioning the ability of international aid and governments to effectively help the people of Haiti as a whole, especially since we passed the anniversary of the earthquake on January 12th and the overall landscape is, indeed, still rather bleak.  Much of the rubble has not been cleared, let alone are many homes and buildings being rebuilt.  Every park and/or open space in Port-au-Prince you can imagine is now an IDP (internally displaced person) camp, housing much of the 1 million-plus Haitians who are estimated to be living in the tents within them. Cholera is a growing problem, and diseases like malaria and tuberculosis persist. While it is difficult to see how and where immediate widespread changes will occur, the organizations we visited provide a stark contrast to the generally grim picture the press has, in many cases rightfully, painted.

The people and infrastructure of Haiti have a long way to go as a whole, and I am proud to be working with project organizations like the ones  mentioned earlier, as well as our corporate partners like Discovery Communications, Capital One, Dell, and Nike to do what we can, no matter how large or small.

Farewell (But I’m not going far)

After ten fabulous years at GlobalGiving, I fully turned over the reins to my co-founder, Mari Kuraishi, at the end of December.  This completes a transition that we began in 2008.

Although the decision to step down was hard, I feel that now is the right time.  We have proven the concept, established a world-class online platform, and made a big impact. When we started ten years ago, the idea of an open-access approach to aid and philanthropy seemed radical; it is now becoming the new norm.

To date, we have helped direct over $47 million to 3,000 organizations in 110 countries.  This funding has come from nearly 140,000 individual donors as well as from many of the world’s most innovative companies, along with their employees and customers.  We have been featured in over forty books and countless magazine articles, radio and TV pieces, and online media. Our success has spurred similar initiatives in other sectors and countries, and we now partner with some of these organizations to push the whole sector ahead.

Our accomplishments and momentum are the product of an amazing team here at GlobalGiving.  Our people are stellar, but more importantly they all work together like a finely oiled machine.  Our project team, donor team, business development team, tech team, finance team, and operations team work seamlessly. They can move new ideas, opportunities, and features from concept to execution and evaluation faster than any organization I have ever worked with.  I really am in awe of the people I have had the privilege to work with at GlobalGiving.

In late 2000, Mari and I left the World Bank to pursue a simple idea: that everyone in the world with an idea for improving their world should be able to have their voice heard.  We believed that any person, company, or organization should be able to support the ideas directly.  Not everyone would succeed, of course, but everyone would have an opportunity.  We had spent our previous careers in aid agencies that granted access to ideas and funding to only a select few.  We thought the time had come for   an open-access market connecting ideas with funding that provided a level playing field for all bona fide participants.

We also felt that with open access should come increased transparency and accountability – and an emphasis on continuous improvement. Our idea was that groups seeking funding should have their proposals displayed publicly, should be willing to answer questions from potential supporters, and should provide frequent updates on the site so that donors could see the impact of their support.  We felt that beneficiaries and others should be able to post reviews and comments on the site for everyone to see. We felt that organizations that learn and adapt should be encouraged and rewarded.  We felt that donors should be able to talk to each other about which projects and organizations they supported, and why.

Though we have not yet achieved everything we set out to do, the bottom line is this: For the first time in history, any group pursuing good in the world can now have its voice heard.  And donors of all sizes are empowered to make a tangible contribution to good in the world by connecting to those groups.  I could not be more proud of that.

Even as I turn over all day-to-day responsibility to Mari, I will remain very active in GlobalGiving.  I will be out there raising awareness, raising money, and advancing the mission.  I believe that over the last ten years we have laid the foundation for our next act, in which GlobalGiving’s impact will be ten times greater.  I intend to help make that happen.

In the first half of 2011, I plan to devote more time to writing and speaking on the general concepts behind GlobalGiving, which are applicable in many other sectors and endeavors.  During that time I will do some consulting for organizations that are looking to break down barriers so that they can unleash the potential of their own people, constituents, and customers.

Finally, I want to thank you for your encouragement and support over the years.  We could not have done it without you, and I am profoundly grateful for what you have done, in ways both big and small.

Crowdsourcing Social Innovation, or How We Learned to Stop Worrying and Open Up GlobalGiving

At GlobalGiving, we’ve been effectively crowdsourcing, crowdfunding, and crowdevaluating social innovation for years.  From early experiments with prediction markets, to collaboration with The Case Foundation and Network for Good on America’s Giving Challenge, to working with GOOD and Pepsi on design and implementation of the Pepsi Refresh Project, we’ve woven experiences into the core mission of GlobalGiving – creating open access to philanthropic markets for small and large organizations worldwide.

We just wrapped up our largest Global Open Challenge ever, an initiative started in 2008 which has become the primary way we find and qualify new organizations for the GlobalGiving marketplace.  Over 230 organizations headquartered in 38 countries serving beneficiaries in 55 countries participated and collectively raised $569,536.  Each organization, in order to secure a spot in the GlobalGiving marketplace, was required to raise $4,000 from at least 50 donors during the month-long challenge.   Over 75 organizations achieved this goal by mobilizing supporters to vouch for them with their donations.

This is not a public voting contest to determine which organization receives a grant, though every donation is a vote.  This is not simply crowdfunding a specific project, though specific projects get funded.  This is not a matching campaign, though there are modest financial incentives.  Using a design thinking approach, we fuse elements of voting, crowdfunding, and matching to identify and qualify organizations for participation in the GlobalGiving marketplace.  We’re using components of all four crowdsourcing models Beth Kanter describes in her recent post:  Creating Collective Knowledge or Wisdom, Crowd Creation, Crowd Voting, and Crowd Funding.

Why would organizations put themselves through this?  Every day, we receive online requests to be part of GlobalGiving, and our goal is to accept as many as can qualify.  We don’t want to turn away innovative, but unproven organizations.  Many of these applications are from individuals or organizations with questionable motivation and capacity.  Many of these applications are from great organizations that need exactly the kinds of tools and services that GlobalGiving provides – a safe, transparent and tax deductible way for donors to give, a set of donor management tools, ongoing trainings, and the possibility of connecting with new donors.  From the applications, it’s hard to tell the difference.

Intead of sorting through applications and having our team decide which organizations gain access, we throw the decision out to the crowd.  We invite every organization that passes our rigorous due diligence process to participate in a Global Open Challenge.  If an organization can mobilize enough funding from enough donors, it’s a good indication that they can use our platform productively and that their idea has support.  It’s hard to get 50 people to give money to a really bad or fraudulent idea.  We’ve gotten pretty good at predicting which organizations will succeed, but there are always big surprises.

This model has the added benefit of sustaining itself.  The transaction fees generated during this process support the large amount of due diligence, training, support, outreach, and disbursement work that goes into throwing a challenge of this magnitude.  We do not charge organizations a fee to participate.  We feel strongly that any organization working towards social change should have a shot at articulating its work and raising philanthropic funds to support its growth.  Manmeet Mehta heads up this initiative at GlobalGiving and has continually enhanced the strategy, the incentives, the processes, and the support to make this an effective and sustainable program for GlobalGiving.

How do organizations hear about GlobalGiving in the first place? A quick Wordle of all responses to the question, “How did you hear about GlobalGiving?” reveals the interplay of offline and online networks that drive participation.  “Friend” and “Internet” figure most prominently:

Wordle: How did you hear about GlobalGiving?

Organization responses to the question, "How did you hear about GlobalGiving?"

I’m proud of the continuous experimentation that has resulted in this method of opening GlobalGiving’s doors as widely as possible.  We’ve tripled the number of organizations using GlobalGiving, and we’ve kept disbursements per organization steady.  Our marketplace is becoming richer in feedback and more self-sustaining.  2010 is already GlobalGiving’s biggest year ever, with over $10,400,000 in donations.